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Volleyball 8, Us 5, Cameron 3, Sammy 3, Todd 3, Alfred 2, Sam Chernin 2, America 2, New England 2, Chad 2, Seth 2, Openf Openforum.com Yourbusiness 1, Barbara Mulligan 1, Olding 1, J.j. Ramberg 1, Cleveland 1, Bing 1, Florida 1, Alfred Edmond 1, J.j. Ramburg 1,
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  MSNBC    Your Business    News/Business.  

    March 12, 2011
    5:30 - 5:59am EST  

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small businesses taking a hit due to rising gas prices. and how the creators of an indoor beach volleyball facility got players to come in from the cold. we're serving up those stories coming up next on "your business."
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hi there, everyone, i'm j.j. ramburg and welcome to "your business" where we give you tips and advice to help your business grow. small businesses were start to go feel optimistic about the economy but now they're voicing concerns about where things are heading. rising gas prices are taking their toll on businesses as owners see their shipping and raw material costs increase. at the same time these entrepreneurs are trying to avoid raising their own prices which could scare off customers. while energy costs skyrocket, housing prices around the country continue to nose dive. with new home sales down
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significantly in january. and then there's the lingering problem of high unemployment, not to mention state and local government budget and debt problems which may lead to massive layoffs. so, how are small businesses holding up? todd maceachen of the small business association, chad mutray of pinchfield consulting and analytics, the former chief economist for the small business administration's office of advocacy. alfred edmond is the multimedia he had or tore at large at black enterprise and cameron johnson is a entrepreneur and author. great to see all of you. todd, i want to ask you first, let's talk about gas prices now. from where you sit, are you telling small businesses, you know what, plan for the worst, start thinking of ways to hedge this. >> i think the key thing to watch, i'm no foreign policy expert but the key thing is saudi arabia. the next couple of weeks whether anything develops there that
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could be dangerous is a real danger sign. gas prices have gone up. we've seen these spikes before and they're definitely a problem as you described for small companies. i haven't been telling people, though, that it's time to really plan for the very worst. we'll see what the next few weeks hold, and if that's the case, you can see a significant rise in gas prices if things develop that could last for a very long time and that would be very bad news for small businesses and the entire u.s. economy. >> and, todd, what are you seeing from your vantage point? is this something small businesses should worry about are for the long term? >> i think it's difficult for small businesses to pass on those costs to their customers. inflation was the number one issue if you look at the surveys. that kind of -- we've seen both insurance costs and more recently poor sales and access to credit being big issues but inflation is definitely something that small businesses are worried about particularly to the extent if they can't pass those on to their consumers.
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>> let's talk about someone who actually runs a business. you run a car dealership. >> yes. >> if it's going to affect anyone, it's going to affect you. are you feeling the pain yet? >> we see it firsthand in buyers' buying decisions. not really hurting us at the same time but i think small business owners coming in who may have opted for a large suv or larger truck might go to something smaller. the real question is, are gas prices going to stay here or is this just a spike and are prices going to come back to what we call normal? >> but as a small business owner, you have to deal with both those scenarios, right? how do you do that? >> it's a matter of having the right inventory. we're used to having a ford dealership, having great suvs and big trucks but now we have to get in the car business because people are looking for 40 miles per gallon because people want to save money and it affects the small business owner. >> and we also talked in that intro, alfred, about housing, and, you know, i read a great study recently about how we've all heard about how small business owners have had trouble
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getting loans but one of the reasons was they couldn't borrow against their homes because their homes are worth so much less. >> the home is a piggy bank, if you will, for all forms of borrowing and investing. that's going to be going on for a little while. we need to just accept that for at least the next few years. on the flip side, this is a great opportunity for small business owners that get serious about forecasting. again, you can't control energy on costs and those expenses but you can say, okay, well, suppose gas prices were at this level, how will we function? how will we organize our business? went up by 28%, and that way at least you can kind of see how it's coming and depend iing on w energy prices go up, you have some plans for how you will react. >> and, todd, do you see a lot of people doing that exercise of saying, okay, let me look to the future and then say, what would i do in this scenario, what would i do in that scenario? >> i think that's a really good point. i don't see people doing it
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enough. i think there is room to do more of that. the thing that's difficult for a small business is typically they don't in any way control the market that they function in. and so they can see how they react to gas prices going up. the difficulty is trying to figure out how their vendors and customers would react or how they would react to that because the gas prices, you know, obviously we think about in terms of car buying decisions and that sort of thing but the really huge impact on a broad base of small companies is that it effects consumer buying decisions. >> that's money in your pocket. >> and they're going to do different things. so it's hard for a small business, though, to know just how much it might affect their demand. >> chad, i want to go back to that housing issue with you. what are you seeing on that front about how housing is going to affect small business? >> well, i know that the national federation of business did a survey on access to credit and they found that housing was a large reason, one of the many reasons why small businesses were not getting access to credit. the credit that they need because, as was just mentioned, the homes are their piggy banks
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that they often use for investing on their own plant equipment and that kind of stuff and so they need their house to be able to be able to tap into that equity, et cetera, and that really is hurting their ability to get access to credit. i know that i'm working with a franchise association right thousand and one of the biggest challenges among franchises are credit and their ability to be able to grow their business and housing is a large part of that. >> we have just been saying problems with credit for so many years now that i look forward to the day, actually, we don't have that conversation. i want to stay with you for one more second, chad, about this idea of the problems going on with local governments, how big of an effect will that have on small businesses? >> well, i think to the extent that hurts the economy in terms of hurting gross domestic product. we have already seen where local and state budget cutbacks have really hurt our gross domestic product and that certainly hurts our ability to grow this economy and get consumers spending again. having said that, i think that your average employer for the most part simply wants so type
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of sanity in terms of government spending and in trying to solve this deficit issue and trying to do that smartly and wisely so that we can get the economy moving again and so that we also when we're cutting spending we also are smart enough to make sure that we're investing for the future as well. >> alfred, we were talking earlier about how things are looking up in business. in your business and a lot of businesses that you're talking to, when you hear these things, gas prices are high, housing is going down, problems in local government, are you still optimistic? >> optimism is relative. you see what we went through the last two or three years, the fact that you're still standing, that you're still operating. the truth is things are getting better but still a very, very bumpy road. the best thing you can say is we're still here. we're still operating and we need to be smart about continuing to do so. >> and what's your feeling? >> well, i agree and i think the small business owner feels it every week as the consumer does. when they go to the gas pump and
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they remember that last week it was $40 to fill up and this week it's $48 and next week it may be $55 that's less honey they put into the economy and that's going to hurt everybody. >> all right. well, all of you four, thank you for joining in this conversation. i appreciate all of your insight. most of us would probably drive 30 minutes or maybe even an hour it to take part in one of our favorite activities. but how does six or seven hours sound to you? is it worth it? well, it certainly is to some customers who are willing to go the distance just for the chance to spike a ball in the sand. they say this indoor volleyball business is serving up more than just competition. >> you see people walking in from the parking lot with their ba backpack and beach chair and you'd swear they're walking down to one of the local beaches but they're not. they're coming here to the sandbox. >> while it may look like the start of just another day at the beach, the truth is the shore is actually miles away. >> the sandbox is an indoor beach sports facility here in
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new england and we offer beach volleyball, dodgeball, beach tennis, all sorts of sports you can play indoors. we've really offered the sporting side of it but we've also offered the aesthetic, the vibe of the beach. >> complete with sand, four volleyball courts and a tiki bar this sandbox is the brainchild of brandon wool rich. he and his partner are beach volleyball players who wanted to turn their passion into a year round activity. >> it was, i guess, slightly selfish motive. i wanted some place to play beach volleyball and it was a good way to make a business out of it. >> a lot of it personally was the fact i could be involved in a sport that i love and be sort of a bigger player and get involved on the higher scale. >> woolrich knew his idea may have some traction. why? this sandbox is the only indoor beach volleyball facility in new england. it also helps that volleyball is a sport for anyone and everyone. >> it just seems to be something that everybody is able to do at
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some level. it allows you to be as x competitive as you want or uncompetitive as you want. you can look at our demographic both in age and gender and it's a pretty diverse array. >> considering volleyball's wide appeal, woolrich needed to do more than just fill his business with diehard players. so he decided to create a community complete with games and tournaments. >> everybody wants to come play in the sandbox no matter how old or young you are. the sense of community i'm trying to develop here is everybody is welcome, all levels of play, all ages, all gender. community is a vast array of people. so you want everybody represented here. >> building the community required a little strategy. first, woolrich needed to attract their base. the key was getting players who would make the trek simply to play at the beach. >> volleyball players are a very niche group in themselves that they will travel 3 and a half that have, 4 hours to go somewhere if it's good play.
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they won't go half an hour for something that's free and not good. >> they reached out to potential cu customers. >> you can advertise on these volleyball lists on the internet, facebook pages, social media, that type of stuff and it slowly makes its way out and it spiders and networks and so suddenly people down in florida are hearing about this place called the sandbox or people in delaware and what not. >> the idea has done the trick. players are going the distance to check out the sandbox. barbara mulligan drove one hour from rhode island just to play. >> some friends talked about this indoor sand that was going to be opening up and that was the first we heard about it. the opportunity of having something over the winter is awesome, kind of keep our sand legs ready for the summer coming up. >> while joseph ward and his friend drove six hours from new jersey for some face time in a tournament. >> we actually have friends down by where we are. they knew about it. and then we looked up on facebook and found out about it. so it was our first time here. >> unlike some fellow volleyball
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players, samantha browning lives locally. >> it's cool getting to know everyone. this is my first year playing beach volleyball. >> she and other mystic area residents praised the sandbox's community approach. even though the number of local customers is lower than expected. >> volleyball is not just sport. volleyball is social as well. >> that's the most important thing as well. you develop a community of the people that come in here. instead of treating them as customers, you tret treat them as a friend, someone who is also your volleyball partner. there's a number of people here today i don't know but certainly i'll try to talk to them before they leave today and, you know, see how did they like it. >> woolrich also says his beach brings together players of all skill levels who might otherwise be opponents. >> there's a lot of groups, oh, they play at this beach and you'll never get on the court with them and they play on this court or they don't like this beach. but everybody comes here. >> the popularity of the sandbox during the winter has helped to make money, but the business faces the inevitable challenge when the weather warms up.
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>> certainly we can't compete with the beach. i'll be down at the beach myself. >> both business owners say there are still plenty of reasons to come to their sand-filled facility. >> we do have the only lighted courts in the area, so there is the fact that the sun does eventually go down and we'll be here still offering volleyball at 7:30, 8:00 at night and we can stay open until 10:00, midnight. >> if we have a tournament here and it rains, we don't have to change the time. you can bank on coming here no matter what. >> with the addition of charity events to the mix, the sandbox is holding tight to its community ideal and they are doing everything they can to make their community grow. >> because that's 99% of the problem from a small business owner, right? how do you get people in the door? now that they've gotten in the door, i'm more that happy to m jump on the court with even the most recreational beginner player. >> alfred and cameron are back with us once again. that's such a fun piece a. few years ago i did a story about mountain biker who opened an indoor mountain biking place in
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cleveland, the same sort of idea. but what strikes me about that and this one is it's so fun but is the market big enough? wouldn't that be your biggest concern when opening something like this? >> well, that's the challenge. for this facility you want to keep that facility full all the time. you don't want any empty courts. so i would explore things like starting youth leagues, go to local schools to say maybe you want to start school teams and create competitive sports with the school systems. you can do private coaching because there are people who really want to get serious about playing volleyball and if somebody can coach and get better and you can go to the olympics, if you will. those are ways you can fill up the courts even when people are going to play volleyball. >> that's a good idea so you have guaranteed customers coming in. i went to this big place up in has mass and it was huge and so much fun and there was a bouncy and all the stuff that my kids loved. i was thinking what do you do during the week? you're paying rent on this enormous building and it probably sits empty. and i felt the same way about
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this maybe. because you're talking about things but that still would happen after school so what happens from 9:00 in the morning until 3:00? >> your expenses are fixed for the month so you have to get as many people in the door whether that means birthday parties for young kids. it sounds like they're doing a great job with the community aspect. i think that's crucial. the first six months, you know, people like it because it's their first time going, but how do you get them to keep coming back and keep driving six hours. >> it's the tiki bar. >> you have to create activities that maybe volleyball is the reason you came. i look at a lot of bowling alleys and bowling leagues. they have nighttime bowling. glow in the dark bowling. glow in the dark volleyball. you bring young adults and say, hey, play volleyball from 11:00 at night until 2:00 in the morning and it's like a big beach party at night. there are things you can do that's not necessarily about the volleyball itself of creating a social atmosphere, almost like a starbucks strategy. it's not about the coffee, it's about going there and being in the environment. >> we did a story on a bowling
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alley here in brooklyn which has bowling but it also has a great restaurant and they also have bands and it was fun. i went there for fun the other day and it was great but that's what they did to make use of all the extra time. >> i could see a cool beach party theme, you know, with a nice, open bar and things like that. >> yeah, and volleyball is sort of a cool community sport. i liked what he said, on the beach these people play at this beach and these people play at this beach but here we bring everyone together. how do you create a community that doesn't scare other people off? so you have the cool volleyball players and they know everyone and they're really good. am i as a beginner going to come in and feel uncomfort able? >> during the day is probably the time you can bring in the young people, the youth, kids with their parents because the nighttime is when the pros get off work. so if you're going to go after 8:00 to play at night, you're probably going to be playing with some really good players because they work during the day because most likely they're olding. somehow you have to fill the beach, if you will, during the
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day, and the biggest advantage, i think, too, when it's really, really cold in new england during the day, kids don't have that many other places to go even if it is 3:00 to 8:00. >> you're telling me. thank you so much, you guys. who says you need to break the bank on costly search engine optimization services because you don't. here are free tools courtesy of allbusiness.com. google offers a number of cools to analyze your site's performance and search trends. the website report card grades on a number of important search criteria. it allows you to compare your search results simultaneously in google, yahoo! and bing. and if you're looking to track down that one decision maker,
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search queries that can help you pinpoint someone's e-mail address. still to come, today's elevator pitcher wants people to take control of their health and stay fit. i'm sam chernin, owner of sammy's fish box. i opened the first sammy's back in 1966. my employees are like family, and i want people that work for me to feel that they're sharing in my success. we purchase as much as we can on the american express open gold card so we can accumulate as many points as possible. i pass on these points to my employees to go on trips with their families. when my employees are happy, my customers are happy. how can the gold card help serve your business? booming is taking care of your business by taking care of your employees.
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♪ let's get physical indoor beach volleyball is one way to stay fit but obviously not everybody does it. today's elevator pitcher has a product born out of his concern that people aren't healthy and active enough. >> hello. my name is seth tropper, ceo of switch2health. we launched a website that rewards people for physical activity. the site is integrated with our product, the replay, which is an activity tracker that records physical activity and after 60 minutes provides a unique reward code, go to the website, enter the code, get points, get rewards. now our business partners, our reward partners, provide access to great rewards to our user community, gain targeted audience and also acquire new customers. we've launched this consumer solution in 2010 and have users throughout the country and establish distribution overseas.
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this coming spring we're prepared to launch a solution for corporate wellness initiatives and we'll do so with key national brands. we're seeking $2 million in financing to support sales and marketing. finance inventory. >> seth, i don't want to cut you off. is there anything else the $2 million will go towards? >> to finance inventory, increase sales and marketing and to support further web development. >> that's a neat idea, all this stuff about rewarding people for doing good, recycling and you get rewards and fitness which clearly i need these days and probably a lot of people out there because entrepreneurs don't always have a lot of time. let's see how our panel thinks did you with your pitch. >> i think this is an excellent idea. there's a couple of target market, both people who are in need of getting fit but i see a market for people who are already into fitness and want to be rewarded for the work that they already do in the gym. so i think this is a great idea and has a lot of legs. >> thank you. >> cameron? >> i think companies are always
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looking for ways to cut health care expenses. i think companies would be willing to put their money behind it because it's cheaptory get our people in shape. i would be interested in talking to you more. >> that's such a neat idea. >> i guess i got my answer. would you take another meeting? >> definitely. >> i think so. >> well, seth, i met you at a panel a while ago. i'm so happy you came on. you were just in the beginnings of the company. it's great to see that it launched. good luck. both of you, thank you so much for everything. and if any of you out there have a product or a service and you want feedback from our elevator pitch panel on your chances of getting interested investors, just send us an e-mail. our address is yourbusiness@msnbc.com. include a short summary of what your company does, how much money you're trying to raise and what you intend to do with the money. somebody out there watching the show might be interested in helping you. it's time now to answer some of your business questions. alfred and cameron are here to help us. we have an e-mail from lisa. she writes, how do i value a
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private company's brand for possible sale? a potential purchaser is interested in the brabd but not the hard assets. does anyone have any insights in how to arrive at a fair price? cameron, i will start with you. >> what would your company sell for if you were selling the hard assets along with the brand because what you've got to be able to do is sell those hard assets to someone else and then sell the brand itself to at least make more money than you would do by just selling the brand. if you're going to somehow not come out to the better by doing this, then why wouldn't you sell the company as a whole? if you're going to break it off, the pieces have to be more than the pie together. >> piggybacking off of that, there are several, half a dozen, for the brand of valuations but two that you can look at. how much more do you charge for your product than a competitor's product that doesn't have the same brand recognition. build that into the valuation. you could also look at how much money you spent to establish the brand in terms of marketing and other moneys that were spent and then come up with how much that
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brand was worth to you. again, it's hard to really evaluate a tangible product. >> those are good starting points. this is a question about marketing to your customers. >> i'm trying to develop a marketing campaign to attract our target audiences, one being musical instrument dealers, and the other drummers and players. what is the best method for achieving that goal? is it, a, social media? b, e-mail blasts? c, print ad? or, d, direct mail via snail mail? >> all right. it's multiple choice here. it's tricky where he's at right now because he's marketing to two very distinct populations. >> well, this is kind of a trick question because there's not an either/or. i would stay away from the print advertising. that would have to be very, very targeted to your audience. if you do an e-mail blast, use social media. people can get to your social
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media through e-mail and vice versa. you want to do both and i think to the degree that you can gather addresses, do snail mail as well. social media and e-mail blasts first and then supported by snail mail. >> it's expensive, though, compare the e-mail to a snail mail direct -- >> that's why i would start with social media/e-mail. it's a no-brainer. it doesn't cost you anything if you put together a good strategy and e-mail the second thing and then i would go to snail mail next. print would be last if you can target it. >> the question, though, when he says social media, how big is your list and how do you intend to grow that list? >> right. and how is he going to do it? partner with affiliates that he will give a percentage to maybe their existing list? what i look for is what is the least amount of money i can spend that will get me the biggest return. and that's definitely not print ads for this type of business. when you have no brand recognition, when you can't target it as targeted as you need to be.
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it just does not make sense. so you have to do something online because it costs the least. >> let's move on to the next one. this is a question about taking your business global. >> are there other resources available outside of the export/import or the private sector for helping finance international trade transactions in emerging markets? >> any ideas? cameron, have you stepped into this world yet? >> i haven't done importing and exporting at this level but one company that i work with that i'm familiar with, they actually produce the product in a foreign country and that country helps finance selling prot duthe prodk to america. it's something we should look at doing here to put people back to work. what this country will do is help finance the company at a zero percent interest loan to produce the product there and then ship it back to america. >> my answer is very similar to that. this is a case where the incentive to finance the trade may be in the other country. >> right. >> if you're not going to use
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our incentives, the import/export bank and other things, other countries have an incentive that they're trying to reach and may be able to do some kind of partnership. >> it makes perfect sense. where do you go to figure out who to talk to there? >> that's the challenge of international finance. >> right. >> you almost have to go country by country. you could start out with the federal government. they could provide resources. but you almost have to be on the ground in these countries to find out the best way to operate. >> a partner or consultant. >> that would be the ideal. >> right. okay. thank you so much for all of this advice. we very much appreciate it. if any of you out there have a question for our experts, all you have to do is go to our website, openf openforum.com/yourbusiness. ask the show link to submit a question to our panel. if you'd rather you can e-mail us your questions and comments. the address is yourbusiness@msnbc.com. looking for a little
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inexpensive help this summer? if so, check out our website of the week. internships.com is a marketplace of more than 45,000 internships around the country. employers can register for free and then post any openings. you can also scan resumes to look for candidates in your area and the site has tips on how to offer a rewarding internship program. to learn more about today's show, just click on our website. it's openforum.com/yourbusiness. you'll find all of today's segments plus web exclusive content with more information to hem your business grow. and don't forget to become a fan of the show on facebook. we look forward to getting your feedback. you can also follow us on twitter. next week a business owner who has managed to mix two risky ventures offering dog sled rides and running a restaurant. >> there's a symbiotic relationship between the two. it's kind of magical, if you
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will. >> find out how this entrepreneur managed to keep his business from going to the dogs for more than 40 years with a fairly unorthodox business plan. until then, i'm j.j. ramberg. and, remember, we make your business our business. i grew up in the bronx. i just loved it here. i'm sam chernin. owner of sammy's fish box. my uncle owned a restaurant up on city island. and we started going to the restaurant in the summers. 8, 9, 10 years old. i knew immediately that this is what i like, never dreaming that i would own seven restaurants. i want people that work for me to feel that they're sharing in my success. so we purchase as much as we can on the american express open gold card. and we accumulate as many membership reward points as possible. and use those points to reward our employees. they get a trip with their family, and some wonderful memories.